Desak Development and Integrus Realty Group are being sued in federal court, accused of collecting millions in fees to manage 81 affordable housing buildings then allowing them to fall into neglect.
The suit claims the firms and their owner, L. Mark DeAngelis, negotiated deals for a nonprofit to buy the properties at inflated prices to boost his fees, according to the Chicago Tribune. The properties were then mismanaged to the point where they racked up numerous building code violations.
DeAngelis called the claims baseless. He previously said he and his firms acted property in all aspects of the transactions and property management.
The buildings now have 17 active violations, and the suit filed Monday in federal court in Chicago predicts “numerous” others are to come.
A Tribune investigation found DeAngelis teamed with Ohio lawyer Meredith Rosenbeck to start a nonprofit called the Better Housing Foundation that began buying buildings in 2016, using bonds issued by the state. The group was able to borrow tens of millions of dollars at reduced interest rates, and the state waived hundreds of thousands of dollars in property taxes.
The properties later failed so many inspections the Chicago Housing Authority banned its aid recipients from moving into most units.
The Better Housing Foundation fired Integrus Realty Group as property manager in the spring, the state revoked the nonprofit’s property tax breaks and the foundation later was absorbed by a larger nonprofit, Invest in America’s Veterans Foundation. [Chicago Tribune] — John O’Brien